Financial Management

Navy Needs to Improve Its Accounting for Ship Fuel Purchases Gao ID: AFMD-91-54 July 23, 1991

Pursuant to a congressional request, GAO reviewed the Navy's practices for acquiring ship fuel, focusing on whether the Navy had adequate controls to ensure that its financial management systems accurately accounted for ship fuel purchases.

GAO found that: (1) since the Atlantic Fleet failed to follow its own procedures for ensuring that fuel purchase accounting records were accurate, it could not detect or correct erroneous fuel purchase records; (2) the Atlantic Fleet either omitted or inaccurately recorded 67 percent of its fuel transactions, totalling $5.9 million, in its accounting records, since personnel failed to correct processing errors and ships failed to report correctly; (3) unrecorded ship fuel purchases accounted for $5 million, or 85 percent, of the identified inaccurate transactions; (4) incorrect amounts caused by duplicate transactions reporting and other accounting errors accounted for $900,000, or 15 percent, of the identified inaccurate balances; (5) the Atlantic Fleet Comptroller did not know if $49.5 million of outstanding fiscal year 1989 fuel purchase transactions recorded in the accounting system were correct or had been paid, since the Atlantic Fleet did not promptly review unpaid purchases; (6) although it did not identify any instances in which the Navy paid for unreceived fuel, Fleet Comptroller officials did not monitor related accounts to ensure that this would not occur; (7) Atlantic Fleet Comptroller officials acknowledged that their accounting system did not accurately and promptly record ship fuel purchases; and (8) it was impossible to determine whether the Pacific Fleet Comptroller's office correctly recorded its ship fuel purchases, since it did not maintain detailed information on ship fuel purchases necessary to monitor the accuracy of obligations and expenditures recorded in its accounting system.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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